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HomeNordic MarketsEstoniaHow FinTech-friendly European Merchant Bank provides Fintech-specific banking services with a partnership...

How FinTech-friendly European Merchant Bank provides Fintech-specific banking services with a partnership mindset.

The Fintech boom as we know it emerged out of the ashes of the 2008 financial crisis. In those days, many Fintechs positioned themselves as a revolt against the status quo. However, 15 years later, this dynamic has changed.

Banks are now turning to Fintechs to help them provide agile solutions, and Fintechs are turning to banks for everything from business bank accounts to financial advice. “Every business needs a bank account, regardless of whether they’re a Fintech or newly established business,” says Güven Aytaş, Head of Global Sales and Member of the Management Board at European Merchant Bank (EMBank). “Unfortunately, traditional banks might give them only a bank account and maybe a little more. We saw a gap where the bank could better serve the needs of Fintechs.”

“We’re bankers by mind but entrepreneurs by heart.”

Güven Aytaş
Global Head of Sales and Member of the Management Board at European Merchant Bank UAB

The solution was EMBank, founded by bankers with an entrepreneurial mindset. Aytaş’s own experience in global banking spans over 25 years, with successful stints at HSBC and Citi. “Banks do certain things very well, and Fintechs do other things well,” Aytaş tells NFM. “We want to combine the best of both worlds at EMBank. We’re bankers by mind but entrepreneurs by heart.”

Fintechs need more than a bank

The 2008 crisis gave rise not only to Fintechs but also to the regulatory behemoth that often frustrates fast-thinking and fast-acting startups. As burdensome as those regulations might feel, general sentiment for regulations has changed for the positive recently.
“Fintech founders generally tend to be great tech people but often lack the financial background to run a Fintech,” Aytaş says. “One core area they often need help with is regulatory compliance.”

Sincere Fintechs wanting to do the right thing can easily be tripped up by conflicting regulatory frameworks. An experienced regulatory advisor is table stakes for any Fintech wanting to enter the game in 2024. EMBank, as a regulated bank, helps them become compliant.

Another gap exists when Fintechs approach traditional banks: Fintechs often need more than one type of bank account, depending on their business model. These could be accumulative accounts for authorised capital, segregated accounts to maintain client funds separate, or safeguarding accounts, which are mandated for any financial institution that holds customer funds.

EMBank provides all of these, in addition to other Fintech-specific services, such as:
A banking-as-a-service platform that Fintechs can plug into so they can offer embedded banking solutions immediately. Consulting and advisory services across all Fintech needs, including investment, compliance, and innovation.

Part of the Lithuanian Fintech boom from the beginning

EMBank received its banking licence from the ECB at the start of the Lithuanian Fintech boom in 2018. For Fintechs wanting to establish a presence in Europe, Lithuania—where EMBank is based—is often their first choice. The small, dynamic country with an approachable regulator attracted numerous Fintechs after its first Fintech strategy, which was driven by the Lithuanian Central Bank. Today, that ecosystem is self-perpetuating, with both public and private institutions working together to achieve Lithuania’s next five-year Fintech strategy.

As a testament to Lithuania’s success, 2022 saw almost 4.5X more funds raised for Fintechs than in 2020, according to the “2022-2023 Fintech Landscape in Lithuania” report produced by Invest Lithuania. The country has over 250 Fintechs, and its licences are fully passportable to the rest of the EU. At the end of 2022, nearly 50% of Fintechs were revenue-funded. Fintechs considering a move to Lithuania will need a Lithuanian bank account. When they sign up with EMBank, they get a partnership as well.

“We consider the Fintechs who are banking with us as clients and partners,” says Aytaş. “We would like them to succeed, and we provide all the support necessary to help them grow.”

NFM Publishing Team
NFM Publishing Team
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